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In this chapter, you will learn: Discuss how the digital age is affecting both consumers and the marketers who serve them; explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers; describe the four major e-marketing domains;...
Chapter Fourteen Marketing in the Digital Age Roadmap: Previewing the Concepts Discuss how the digital age is affecting both consumers and the marketers who serve them Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers Describe the four major e-marketing domains Discuss how companies go about conducting e-marketing to profitably deliver more value to customers Overview the promise and challenges that e-commerce presents for the future Copyright 2007, Prentice Hall, Inc 14-2 Case Study Amazon.com – Online Pioneer Background Began selling books; now markets many other merchandise lines One of the best known names on the Web Sales have been strong but firm did not turn a profit until 2003 Skeptics predict tougher times in years to come Marketing Efforts Customer-driven: strives to design the best customer experience on the Web Personalized sign-on pages and recommendations, huge selection, good value, and convenience result in strong buyer relationships Will Amazon become the Wal-Mart of the Web? Forces Shaping the Digital Age Digitalization andConnectivity – Intranets • connect people within a company – Extranets • connect a company with its suppliers, distributors, and outside partners – Internet • connects users around the world Forces Shaping the Digital Age Internet Explosion – Explosive worldwide growth forms the heart of the New Economy – Increasing numbers of users worldwide, and broadband users in the U.S – Greater numbers of consumers are accessing information on the Internet – Companies must adopt Internet technology or risk being left behind Marketing Strategy in the Digital Age Requires a new model for marketing strategy and practice Companies need to retain old skills and practices but add new competencies E-Business in the Digital Age Involves the use of electronic platforms to conduct company business – Web sites for selling and customer relations – Intranets for within-company communication – Extranets connecting with major suppliers and distributors E-Commerce in the Digital Age More specific than e-business Involves buying and selling processes supported by electronic means, primarily the Internet Includes: – e-marketing – e-purchasing (e-procurement) E-Marketing in the Digital Age The marketing side of e-commerce Includes efforts to communicate about, promote, and sell products and services over the Internet E-purchasing is the buying side of e-commerce – It consists of companies purchasing goods Benefits to Buyers Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate Consumer to Consumer (C2C) Occurs on the Web and includes a wide range of products and services – Auction sites such as eBay offer marketplaces to buy or exchange goods – Blogs and forums facilitate information interchanges • Blog: online journals where people post thoughts on a narrowly defined topic • Forums: discussion groups located on commercial online services Consumer to Business (C2B) Consumers can search out sellers, view offers, initiate purchases, and give feedback – Example: on priceline.com, one can bid for airline tickets, hotel rooms, etc., and decide whether to accept company offers Click-Only Companies E-tailers Search engines and portals Shopping comparison sites Internet service providers Transaction sites Content sites Reasons for dot.com Failures Poor research or planning Relied on spin and hype instead of marketing strategies Spent too heavily on brand identities Devoted too much effort to acquiring new customers instead of building loyalty Click-and-Mortar Companies Established firms initially resisted adding Web sites because of channel conflict and cannibalization concerns Risk of online competition forced firms to become click-and-mortar companies Most are now doing better than click-only companies because of: – – – – – Trusted brand names and more resources Large customer bases More knowledge and experience Good relationships with suppliers Can offer customers more options Online Marketing Creating a Web site Placing ads and promotions online Setting up and participating in Web communities Using e-mail Types of Web Sites Corporate Web Site: Designed to build customer goodwill and supplement other sales channels – Offers information to customers – Builds closer customer relationships – Generates excitement about the company Types of Web Sites Marketing Web Site: Engages consumers in an interaction that moves them closer to a direct purchase or other marketing outcome – May include catalogs, shopping tips, promotional features, and more Designing Attractive Web Sites The Cs of Effective Web Site Design: – – – – – – – Context Content Community Customization Communication Connection Commerce Constant change helps encourage repeat visits Online Ads Forms of online advertising: – Banner ads: • Tickers (move across the screen) • Skyscrapers (tall, skinny ads at the side of a page) • Rectangles (boxes that are larger than a banner) – Interstitials (pop up OR pop under between changes on Web site) – Search-related ads (contextual advertising) – Rich media ads (incorporate animation, video, sound, and interactivity) Online Promotion Forms of online promotion: – Content sponsorships (sponsoring special content) – Microsites (limited areas paid for by an external company) – Alliances and affiliate programs (work with firms to promote each other) – Viral marketing (Internet version of wordof-mouth) The Future of Online Advertising May grow to 10-15% of media mix for low-involvement product categories Web communities: – Allow members to congregate online and exchange views on issues of interest E-mail: – Use of “enriched” e-mail messages – Backlash against spam can be problem – Allow people to opt-out of promotions E-Commerce Problems and Challenges Likely that online marketing will remain a technique working with full IMC mix Internet profitability remains problematic for B2C firms Navigation difficulties continue as the number of Web sites grows Dot.com retailers are facing growing competition Legal and ethical issues also exist Legal and Ethical Issues Online privacy Online security Internet fraud Segmentation and discrimination Access by vulnerable or unauthorized groups Rest Stop: Reviewing the Concepts Discuss how the digital age is affecting both consumers and the marketers who serve them Explain how companies have responded to the Internet and other powerful new technologies with e-business strategies, and how these strategies have resulted in benefits to both buyers and sellers Describe the four major e-marketing domains Discuss how companies go about conducting e-marketing to profitably deliver more value to customers Overview the promise and challenges that e-commerce presents for the future Copyright 2007, Prentice Hall, Inc 14-29 ... e-business Involves buying and selling processes supported by electronic means, primarily the Internet Includes: – e -marketing – e-purchasing (e-procurement) E -Marketing in the Digital Age. .. users in the U.S – Greater numbers of consumers are accessing information on the Internet – Companies must adopt Internet technology or risk being left behind Marketing Strategy in the Digital Age. .. with firms to promote each other) – Viral marketing (Internet version of wordof-mouth) The Future of Online Advertising May grow to 1 0-1 5% of media mix for low-involvement product categories